Whiteflash uses Bold Software’s live chat to help customers shop for diamonds

As live chat has improved due to advancing technology and a better understanding of how and when consumers want text-based contact, its role for online companies has expanded beyond simple customer service to include lead generation and customer-relationship management.

"Live chat started, really, as a 'call avoidance' tool, in that companies were looking to drive people to that channel because it was cheaper than having someone pick up the phone," says Ross Haskell, VP of marketing at Bold Software, a Wichita, Kan.-based provider of chat solutions. "Over the last five years, it's also evolved into a sales tool, but companies are stepping back and realizing this is another communications channel for not only prospects but also existing customers and past customers."

Part of what is driving the trend is that many people are now comfortable with pop-up boxes for text-based communication, and in some cases even prefer it to other channels.

"Not only is it efficient, but there's an anonymity and people also feel they're in control," Haskell says. "So during a chat you can say, 'Hang on, the baby's crying,' and it doesn't feel rude."

Debi Wexler, CEO of Whiteflash, a Houston-based jewelry site that uses Bold Software for live chat, says the technology has not only proved to be a useful tool for customers looking to, say, anonymously shop for diamond jewelry while at work — it has also proved ideal for international shoppers more comfortable with writing English than speaking it.

Because live chat alone does not qualify as a traditional opt-in, Osbo-rne stresses, a company must be careful about how it handles follow-up messaging. "It actually works really well to request an email after the live chat session has already begun," he says, "because consumers are more likely to provide that information if they feel there is a human conversation going on."

Kyle West, founder of RPMWare, a site that sells auto parts, worked with Olark, a Palo Alto, Calif.-based firm providing real-time chat and monitoring, to improve its live chat functionality. Leverage it as a marketing and sales tool, and provide customers easy access to company representatives.

"We maintain a vast database of all the different cars and products, and because what we do is so unique, we end up handling a lot of specific questions from customers, many of whom are mechanics who may not be very tech-savvy," West says. "Having the ability to get in touch with someone and get a question answered through chat is turning out to be a big deal."

Roland Osborne, cofounder of Olark, says both b-to-b and consumer sites are realizing that the more knowledgeable an agent using live chat is, the more effective a CRM tool live chat can be. "There's a real value in being able to provide customers with a friendly and knowledgeable face," he says.

But Chris Golec, founder and CEO of Demandbase, cautions that companies threaten to overwhelm their staffs. "If you just deploy chat for everyone, you can spend a lot of resources talking to people who have little chance of becoming customers," he says.

Demandbase provides technology that plugs into existing chat programs and can look at specific IP addresses of site visitors to discover, in real-time, whether they're already customers or what industry they're in.

"By being proactive, you can literally triple the number of lead conversions," says Golec. "Engaging the right people at the right time can make a world of difference."

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